ICYMI – FHA MI Rates Are Dropping this Month

Attention FHA Home Buyers,… FHA MI Rates are dropping this month! The new, lower rates apply to the monthly mortgage insurance premiums (and not the up-front premiums). How much money can this save you? Below are the details.

New FHA MI Rates

The following monthly FHA MI rates apply to 30 year FHA home loans.

Loan Amount

Down Payment

Old Rate

New Rate

up to $625,500

<5%

0.085%

0.06%

up to $625,500

5%+

0.08%

0.055%

> $625,500

<5%

0.105%

0.06%

> $625,500

5%+

0.1%

0.055%

Savings Calculations

Here are some examples of how much this could potentially save you each month. Again, we’re assuming that these are all 30 year mortgages. Different rates apply to loans with terms of 15 years or less, although those rates are also dropping this month.

Loan Amount

Down Payment

Old MI

New MI

Savings

$400,000

5%

$320

$220

$100

$500,000

5%

$400

$275

$125

$625,500

5%

$500

$344

$156

$700,000

5%

$700

$385

$315

New FHA MI Rates Take Effect January 27, 2017

It is important to note that the new FHA MI rates take effect January 27, 2017. Loans disbursed on or after that date will receive the new rates. Your loan application, processing, case number, and closing dates will not matter. Only the funds disbursement date will matter. In Massachusetts, funds are typically disbursed on or very shortly after closing.

What This Means For Burlington MA Home Buyers

If you are a home buyer in Burlington MA and have a closing scheduled just before January 27, 2017, contact your lender, attorney, and/or real estate agent. Given the potential savings for a closing on or after January 27th, you may want to look into a possible closing extension. Of course, the other parties in the transaction will need to agree to this change and there may be other complicating factors.

For FHA approved buyers who have not yet found a home, you will be spending less money each month on your mortgage payment. That’s always great news. If you find yourself losing out in bidding wars, you may want to check if you are now approved for a higher loan. That monthly savings may allow you to increase your purchase price. Contact your loan officer for assistance.

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